Retirement in Reach
A secure retirement is out of reach for more and more Oregonians.
The Great Recession, the housing crash and bad corporate actors like Enron have taken a toll on retirement savings and employee pensions, causing many Oregonians to delay retirement. It’s all too common to hear people say, “I’ll have to work until I die.”
Today, most Oregon retirees rely on Social Security for a large percentage of their income. The bottom 25 percent of income earners rely on Social Security for 85 percent of their income and the middle 50 percent rely on it for nearly 72 percent of their income.*
We can—and must—find solutions that serve Oregonians and protect state resources.
Just as Oregon led the charge in addressing problems in our healthcare system, we need to tackle the challenge of creating retirement security for all working Oregonians.
Read more about Oregon's effort to develop a long-term solution to retirement security - called "Retirement in Reach," or HB 3436.
PERS and the 2013 Legislative Session
During the 2013 session over 40 bills have been introduced to date by the Legislature related to PERS Reform. While 39 bills have not moved, one bill, Senate Bill 822 has passed both the Senate and the House Chambers and has been signed by the Governor.
Senate Bill 822 is based on the Co-Chairs of the Joint Ways and Means' budget proposal released earlier in the session. The bill impacts all public employees – retired and active. Senate Bill 822 does the following:
1. Creates a Graduated Cost of Living Adjustment (COLA).
In other words, retirees will receive the normal 2% COLA on the first $20,000 of their retirement benefit, however, as the benefit increases, the COLA percent will decrease. (Ex: for the next $20,001 - $40,000 in benefits members will only received a 1.5% COLA).
- In order to give the PERS agency enough time to implement this new formula, for the first year of the coming biennium the COLA rate will drop from 2% to 1.5% for all retirement income.
2. Eliminates the tax reimbursement retirees living out of state currently receive.
3. Directs the PERS Board to collar 1.9% of employer rate increase. Collaring is a common practice for pension systems to help smooth out the ups and downs of the investment market
The Future of PERS
Due to Wall Street misdeeds that led to the 2008 economic crisis, all public and private pensions for millions of Americans have suffered significantly. As a result, here in Oregon, we are faced with having to clean up the mess made by bad-behaving investment banks and others who abused our financial system.
Oregonians who have worked hard and played by the rules their whole life should not have to retire into poverty and then have to rely on taxpayer-funded services for the care they need. After decades in the workforce and contributing directly to the health of the community, we owe our seniors nothing less.
Any policy change to PERS must meet three criteria:
- It has to save actual money in the short term while still maintaining the health and affordability of the system in the long run.
- It has to be constitutional. We can’t go back on the promises made to Oregonians who have worked hard their whole life. It’s wrong and it will end up costing us millions in litigation.
- It has to be fair. We can’t create a system of winners and losers. And we can’t unjustly punish working and middle class families for a problem that Wall Street created.